UK: Weekly Financial Services Regulatory Update - Week To 28.09.12

This weekly update from Clyde & Co's Financial Services Regulatory Team summarises new developments as reported by the FSA, the UKLA, the Upper Tribunal, the Financial Ombudsman Service and the London Stock Exchange over the past week, with links to the full documents where these are available.

We hope that you will find this update useful. If you have any queries about any of the information in this update or financial services regulatory matters generally, please contact one of the individuals listed in the 'Contacts' section of this publication.

If you have any comments on the content or format of the update or if you no longer wish to receive it, or have a colleague who would like to receive it, please email

Consultation papers:

No new developments this week.

Discussion papers:

No new developments this week.

Policy statements:

28 September: FSCS changes to the Compensation sourcebook. The FSA has published a Policy Statement presenting final rules on changes to the Compensation sourcebook (COMP), following its March 2012 consultation paper. The changes are designed to allow the FSA to deal with claims quickly and more effectively. The amended rules will come into effect as of 1 October 2012 with the exception of the disclosure change which will be effective as of 1 April 2013.

Press releases:

24 September: FSA charges Ben Wilson, trading as SureInvestment, in relation to an unauthorised investment scheme. The FSA has charged Benjamin Edward Weymouth Wilson of Bournemouth, Dorset, with seven offences relating to an unauthorised investment scheme he operated which was contrary to sections 19 and 23 of FSMA amongst other changes. Mr Wilson, trading as SureInvestment, operated a scheme that said it carried out futures trading for the benefit of its investors. The charges follow searches of two premises in Poole owned or controlled by Mr Wilson which were conducted by the FSA with the assistance of the Dorset Police on 28 June 2011 and at which Mr Wilson was arrested. Mr Wilson has been bailed to attend City of London Magistrates Court on 5 October 2012.


28 September: Martin Wheatley: 'Pushing the reset button on LIBOR'. The FSA has published a speech by Martin Wheatley (delivered at the same time as his final report on the LIBOR review), entitled 'Pushing the reset button on LIBOR'. Mr Wheatley stresses the importance of restoring integrity to the LIBOR rating, emphasising that this is not a London issue but one which will require global cooperation. Mr Wheatley identifies some of the key themes which contributed to what went wrong with the LIBOR system. First, the submission system's inability to manage conflicts of interest; traders were able to manipulate the LIBOR rate to boost bonuses and, at the height of the crisis, banks manipulated the rate to appear more creditworthy than they were. Second, people had too much trust in a system with too few checks and balances and not enough regulation, oversight and governance.

Mr Wheatley recommends that the FSA is given clear and extensive powers over the submission and administration of LIBOR. In addition, there should be an overhauled governance structure with a new independent body that sets out clear rules and procedures regarding submissions. Governance should be removed from the BBA and institutions are invited to tender for the role of new administrator.

26 September 2012: Tracey McDermott: 'Strengthening Defences: Tackling Financial Crime from the Regulator's Perspective' . The FSA has published a speech by Tracey McDermott entitled 'Strengthening Defences: Tackling Financial Crime from the Regulator's Perspective'. In her speech, she outlines the role of the FSA (and in turn, the FCA) in tackling financial crime and how the regulatory bodies need to work with other agencies in the industry in order to be effective. She comments that the new FCA has a clear mandate to tackle financial crime which the PRA does not and that this should hopefully combat any muddling overlap problems. She, however, highlights that the PRA will be looking to tackle financial crime from an operational and reputational risk point of view whereas the FCA will focus on protecting consumers and stopping firms facilitating financial crime for which they can be a conduit.

Further, she highlights that in order to combat investment fraud the regulators cannot act alone; the industry must also contribute by way of internal safeguards. There needs to be a strong management commitment to better culture and values, with a shift in focus towards public interest away from profits. Incentive structures must be reassessed so that they do not aggravate financial crime risk.

25 September: Speech by Clive Adamson: 'Supervision of Asset Managers under the Financial Conduct Authority'. The FSA has published a speech by Clive Adamson, entitled 'Supervision of Asset Managers under the Financial Conduct Authority', which was delivered at the FSA's Asset Management Conference. Mr Adamson discusses how the approach of the FCA will differ from that currently adopted by the FSA, mainly in that the FCA aims to act earlier in addressing and combating problems before harm is caused and therefore resulting in a fairer and more orderly market for customers. Mr Adamson details the structure in which the FCA hopes to achieve this by introducing four new supervision categories for firms, C1, C2, C3 and C4, while those (23,000) firms that will be prudentially regulated by the FCA will also be allocated one of three separate prudential categories, CP1, CP2 or CP3.

25 Sep: Speech by Martin Wheatley: 'My vision for conduct regulation and how it will affect asset managers'. The FSA has published a speech by Martin Wheatley entitled 'My vision for conduct regulation and how it will affect asset managers' delivered at the FSA's Asset Management Conference. Mr Wheatley discusses the new approach of the FCA with regard to the role of asset managers adopting a fiduciary duty to their investors which goes beyond the letter of FSA rules. Mr Wheatley discusses the new approach of the FCA in the context of two key themes which are:

  • Charges, competition and the gap between asset managers and the end consumer
  • What changes the FSA is going through in preparation to become the FCA

Bulletins and newsletters:

No new developments this week.

Final notices:

No new developments this week.

Application refusals:

No new developments this week.

Approved person refusals:

No new developments this week.

Research publications:

No new developments this week.

Consumer research:

No new developments this week.

Other FSA publications:

28 September 2012: Wheatley report on LIBOR. HM Treasury has published the final report on the Wheatley Review of LIBOR following an independent review into a number of LIBOR-related issues. Wheatley draws out three fundamental conclusions that underpin his recommendations: the first is the clear case in favour of comprehensively reforming LIBOR rather than replacing it; the second is that transaction data should be explicitly used to support LIBOR submissions; and the third is that market participants should continue to play a significant role in the production and oversight of LIBOR. The report sets out a ten-point plan for the complete reform of LIBOR. These proposals include the statutory regulation of LIBOR submissions and the administration process, introducing relevant 'Approved Persons' requirements for it; transferring the responsibility for LIBOR away from the BBA to a new administrator which would have to set up a new code of conduct for submitters; and a number of immediate improvements to LIBOR, including a phased removal of lesser-used currencies (from 10 to five) and less liquid maturities with an increased number of banks involved in the LIBOR compilation process.

28 September 2012: FSA Handbook Notice 123. The FSA has published handbook notice 123 setting out the changes made to the FSA handbook under instruments made by the FSA Board on 27 September 2012.

28 September 2012: FSA Handbook Development Newsletter. The FSA has published a new Handbook Development Issue 151 'Policy Development Update' which covers summaries of recent publications, consultation papers, guidance consultations and finalised guidance issued since the last edition. Consultation papers include:

  • Regulatory Reform: PRA and FCA regimes relating to aspects of authorisation and supervision – CP12/24
  • Addressing the implications of non-EEA national depositor preference regimes – CP12/23
  • Client assets regime: EMIR, multiple pools and the wider review – CP12/22<

27 Sep 2012: Adjustments to FSA's liquidity and capital regime for UK banks and building societies. In June 2012, HM Treasury and the Bank of England announced a series of measures to provide additional liquidity and support lending. To ensure that the microprudential framework does not counteract the actions taken to encourage lending, the FSA has made adjustments to the liquidity and capital regimes for UK banks and building societies. These changes have been communicated to the Financial Policy Committee which has also published the record of its meeting held on 14 September 2012.

The FSA's liquidity guidance regime is designed that liquid asset buffers (LAB) can be drawn down in the event of liquidity stress and used for the duration of that period. The FSA has made clear that all of the buffer can be used in times of stress and that banks will be given reasonable time to rebuild their buffers subsequently. The Bank of England will make available additional liquidity for response to actual or prospective market-wide stresses in order to mitigate risk to financial stability.

Where firms increase UK lending, the FSA will make an allowance for this increase in the minimum Pillar 1 capital requirements by reducing the Pillar 2 capital planning buffer requirements, thereby ensuring that no bank will be required to hold the additional capital requirements of the increased lending. The precise calculation of this offset will be discussed and determined on a firm-by-firm basis.

27 September 2012: FSA complaints data for first half of 2012. The FSA has published its latest set of complaints data for the first half of 2012. The total number of complaints increased overall by 56%, with complaints about PPI accounting for 62% of total complaints. Within banking products, complaints about current accounts dropped by 13%, however there was an increase of 2% in complaints about savings and other banking products. Complaints about credit cards and unregistered loans continued to increase.

25 September 2012: General Guidance on Proportionality for Remuneration. The FSA has published finalised guidance on proportionality and remuneration in FG12/19, following its July 2012 guidance consultation. The key change set out in the guidance is replacement of the current four-tier division of remuneration code firms (based on capital resources) with three new levels (based on total assets). The revised approach will allow the FSA to focus on firms which pose the most significant risk to financial instability.

24 September 2012: UK notification process for market-making activities and primary market operations. The FSA has published the notification forms for making UK notifications to obtain market-maker and primary dealer exemptions under Article 17 of the EU Short Selling Regulation, together with a webpage on the Short Selling Regulation.

UKLA publications:

No new developments this week.

Upper Tribunal (Tax and Chancery Chamber) (formerly Financial Services and Markets Tribunal (FSMT)):

28 September 2012: Upper Tribunal upholds FSA decision to ban and fine two former traders and a fund manager for market abuse. The tribunal upheld the FSA's decision to fine Stefan Chaligné, a Swiss-based hedge fund manager £900,000 and directed the FSA to fine Patrick Sejean, a former senior salesman on Cantor Fitzgerald Europe's (CFE) London-based French desk £650,000 (an increase on the £550,000 set out in the FSA's original decision notice). The FSA did not seek to fine Tidiane Diallo, former junior trader at the same desk, for reasons of financial hardship. The tribunal upheld the FSA's decision to ban all three individuals from performing any role in regulated financial services.

Financial Ombudsman Service (FOS):

No new developments this week.

London Stock Exchange (LSE):

24 September 20121: Sberbank raises $5bn in largest listing of 2012. Sberbank, the largest commercial bank in Russia entered the main market on 24 September 2012. The central Bank of Russia (the company's majority stakeholder) has raised $5.2 billion through the offering of ordinary shares and global depository shares (GDSs), with the GDSs admitted to trading on London Stock Exchange's International Order Book (IOB). The transaction is the fourth largest ever international capital-raising on the London markets.

26 September 2012: London Stock Exchange Group plc pre-close period update for the five months ended 31 August 2012. The LSE Group has issued a press release on the pre-close period update for the five months up to 31 August 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.